According to a recent report from the think tank Global Trade Research Initiative (GTRI), India’s exports to the United States fell 37.5% between May and September 2025. In dollar-terms, exports dropped from US $8.8 billion in May to US $5.5 billion in September.
🏭 Which Sectors Were Hit Hard
The downturn was broad-based, affecting many key export sectors:
- Smartphones, pharmaceuticals, metals, and auto parts saw substantial declines in shipments to the US
- Labour-intensive sectors — including textiles, garments, gems & jewellery, chemicals and agri-food — experienced a ~33% fall in their export shipments during the period.
- Solar panels, marine/seafood exports, home textiles, yarn/fabrics also saw steep drops.
According to the report, even categories that were earlier tariff-free saw sharp export declines — showing the deep impact of the changed trade dynamics.
🔎 Why the Drop — Role of US Tariffs & Trade Environment
- The US government — under new tariff policy — imposed sweeping import duties on Indian goods in 2025. By late August, tariffs on a wide range of Indian exports had risen to 50%.
- The tariff surge squeezed margins, made Indian goods less price-competitive, and triggered a sharp fall in orders from US buyers.
- The drop also exposed structural vulnerabilities in India’s export basket — heavy reliance on certain sectors and markets made the trade dependent on external policy moves.
🌐 What It Means: Challenges for Indian Trade & Economy
- Exporters face serious distress: Companies in affected sectors — textiles, gems, apparels, electronics, pharma — may see order cancellations, revenue losses and pressure on working capital.
- Trade balance & currency pressure: Lower exports to the US may widen India’s trade deficit; in fact, the currency has already faced depreciation amid export headwinds. Reuters
- Need for export diversification: The slump underlines why relying heavily on one export destination (even if large) is risky — India may need to deepen trade ties with other markets.
- Strain on labour-intensive segments: Industries employing millions — garments, gems, textiles — could hurt, leading to job losses or layoffs, affecting livelihoods.
🧑💼 What’s Being Done & What to Watch
- The Indian government and trade bodies are signalling a push for export diversification — seeking new markets, exploring bilateral trade agreements, and supporting vulnerable exporters.
- There are calls for policy interventions — export-promotion programmes, incentives for alternative markets, and support for labour-intensive sectors to cushion the impact.
- Observers now watch whether exports rebound after recent dip — or whether the slump continues if tariff issues remain unresolved.
